Medicare: To take Advantage, or
not!
Thanks to a little gift from your
favorite congressman, there's confusion over Medicare and Medicare Advantage.
Not happy with the simplicity of plain-old-vanilla Medicare (and the fact that
insurance companies were left out of the financial loop), congress came up with
the bright idea of introducing "competition" into the public system. They
allowed private insurers the opportunity to provide health care services to
Medicare patients.
For some patients the plans work okay.
But unfortunately for the taxpayers, Advantage is 12.5% more costly than what
straight Medicare pays, so the myth that the private sector is cheaper than the
public has been terribly shattered. They do have added costs, like marketing and
actuarial, which is the process of deciding which patients to allow into the
system and which to deny. Thus we pay extra for their sales commissions and the
cherry-picking that draws healthy people from the senior pool and makes real
Medicare look less efficient.
Traditional Medicare is probably the
only part of our health care system that does work well. It didn't need
competition, but if it did, paying private insurers 12.5% more dollars is not
the free market approach most of us would expect. It's just another government
giveaway to private industry.
Medicare patients currently go to their
doctors for care and the government pays the bill though a private administrator
(which is WPS in Wisconsin). What could be simpler? You get sick; you get care;
and the care-giver gets paid!
The biggest disadvantage with Advantage
(pun intended) is that the government pays the private insurers a lump sum per
patient, and whatever health services the plan can avoid providing goes to the
bottom line in profits. Thus there too often is an incentive to deny services
even when the patient is in need, or to have "pre-authorization" requirements
that are easily overlooked by the patient, who then gets stuck with the bill
rather than the plan.
To be fair, some Advantage HMO plans
have tried to offset these issues by adding additional services, like limited
dental and vision, but still these features can have tricky referral and
pre-authorization requirements that void them. Medicare Advantage plans can also
deny coverage when hospital admissions are not pre-approved, thus sticking the
patient with a massive bill. That's great flexibility, but it's all theirs.
In regular Medicare physicians are
reimbursed on a fee-for-service basis and they get paid no matter how many times
you see them or tests they perform. But you are not denied care. If anything it
can actually increase costs to the government, especially if the tests add
profits to the physician's bottom line. But even while providing more testing,
Medicare's outlay per patient is still 12.5% lower than the Advantage system,
and most certainly lower than the high-profit policies. But we taxpayers are
generous.
Our problem is not competition between
the various insurance entities; it is systemic. A true single payer system, like
the Medicare-for-all system proposed by U.S. Rep John Conyers (HR676), would
eliminate the gigantic waste of the insurance bureaucracy which consumes roughly
30% of health care dollars without ever providing direct health care services.
The Improved Medicare-for-all Act would cut in half these administrative costs,
add dental and vision, eliminate co-pays and deductibles, and still provide
coverage for 100% of our population, all at a lower cost than our current
privatized system.
Politicians can fix the problem if they
are willing to shun the delaying tactics being used. We've seen enough
experiments; they must simply sideline the special interests and adopt the
Conyers bill. Business needs it, and so does our economy.
-- Jack
E. Lohman is a retired business owner from Colgate, author of "Politicians --
Owned and Operated by Corporate America" and founder of
www.ThrowTheRascalsOut.org. He can be reached at
jlohman@execpc.com.